TSP question: no way to close out account while still in gov't service?

[Benko]

I am a gov't employee and have a large amount in my tsp account.  I was looking at all my options and to my surprise am told that while still in gov't service, there is no way to close the account out and take my money out (even if I pay a penalty) unless

1.  Dire financial emergency (you have to swear on penalty of purgery) or
2. 59 years of age.

PLEASE DON"T ASK WHY I'm considering this.  I just want to know if this is possible.

Thanks and yes I've called the TSP and have been told no it is not possible, but people who answer the phones are not always most competent, and there are frequently ways around things if one is clever enough.

[Greg]

I haven't found a way to get out of it yet. You can get a TSP loan if necessary. I see TSP as not too bad and a lot of companies are worse off than the TSP. I haven't found anyone with lower expense ratios and the G Fund you can't get anywhere else.

That being said, I wish there was a brokerage window but I haven't found one yet. And as far as I know, you can take out either full or partial but only if you quit your job.

[TripleB]

Are you looking to cash out your TSP/401k to buy gold? If so, you're the third person I read about just today on the internet who's doing this.

It's about time for me to short gold in my VP.

[Reub]

Benko, I would embrace the TSP and what it offers. As was stated, the G fund is a real gift.

[Benko]

Benko, I would embrace the TSP and what it offers. As was stated, the G fund is a real gift.

There are 3 possible ways to look at things (given that I'm not Clive/investment geek type):

1.  Boggle approach
2.  PP aproach
3. SHTF/End of world type/black swan scenarios.  I have a large amount in TSP, (80%), 20% outside TSP but while I don't think this is going to happen tomorrow, something seriuosly unpleasant is more than remotely possible in the next 5-10+ years.  What I will probably do is to stop contributing to it and start using the perth mint.

[Reub]

Aren't you getting matching contributions from the government?

[Benko]

Yes.

[TripleB]

I don't think this is going to happen tomorrow, something seriuosly unpleasant is more than remotely possible in the next 5-10+ years. 

Economics tells us that something unpleasant is very likely to happen to the US and global economies. However, economics cannot tell us *when* that's going to happen.

If you were an informed adult in the 1970s, you'd likely very much believe the US economy would collapse within 5 to 10 years.

Same for the 1930s.

We could all be looking back at the present time in 20 years thinking about how much better things were in 2012 and how *for sure* the country will collapse imminently due to horrible government policy.

The government has been very adept at kicking the can down the road and will likely continue doing so. In the event that they do not, then everyone else will be screwed to, so if you think you'll be able to live like a king in post-collapse America because of a few pounds of gold, you're probably mistaken. Someone with a gun will just come by and take your few pounds of gold and kill you.

If you really did TSHTF was imminent,  you'd be better off quitting your job, buying an assault rifle, buying 100k rounds of ammo, and training daily, shooting 200 rounds a day so that by the time TSHTF you are a ninja with that rifle. Also work out so you are in 8% body fat and incredible shape. Age isn't a factor - look at Randy Couture who fought UFC competitively at 50.

Put your money where your mouth is. Quit your job, start training, learn survival skills and be an expert. You'd be much off with those 5 to 10 years of ninja and survival skills then if you cash out your 401k/TSP, buy gold coins and continue going to work eating junk food and living a sedentary lifestyle.

Note: I'm not referring directly to you Benko because maybe you're a former SEAL and your day job is FBI HRT. I'm responding to the multitude of similar posts I've seen around the web in recent weeks/months.

[HB Reader]

Benko, I would embrace the TSP and what it offers. As was stated, the G fund is a real gift.

I agree.  Make the most you can of it.  In addition to using the G (cash) and C (stock) funds as PP components, you can use the F fund for about 40% (10% of your overall PP) of your bond component.  Use long-dated zero coupon Treasuries, or EDV, in an IRA for the other 60% (15% of the overall PP) of the bond component.  I used zeroes to balance my F fund holdings for much of the 1990s and early 2000s.

If the TSP is 80% (and growing) of your total holdings I can see your "balance" problem.  You might also consider just contributing the amount that will be matched (since you get an immediate 100% percent return) and investing the unmatched amount outside the TSP for a limited period of time. 

I was in the TSP from its inception in the 1980s until 2003.  On balance, I found the advantages far outweighed the occaisonal balance problems.  I really don't think it that much different today.   

[Reub]

Benko, the matching funds are a HUGE advantage.Why not just embrace it?